Fundamentally Speaking

One of the highlights of the grain trade this week will be the USDA February Outlook Forum on Thursday and Friday as planted acreage estimates along with preliminary balance sheets for the 2025/26 season will be released.

The trade is already looking for a rise in the U.S. corn planted area this year and a corresponding decline in seeded soybean area.

Last week saw CoBank pegging U.S. corn area at 94.55 million acres vs. 90.6 million acres last year, while forecasting U.S. soybean area at 84 million acres vs. 87.1 million acres last year.

A survey released over the weekend shows the trade looking for soybean acres between 83.1 and 86.5 million with an average estimate of 84.4 mil while corn acres are projected between 92 and 95.1 million with an average estimate of 93.5 million.

These of course will be the first of a number of USDA projections on seeded acreage this year as Ag Outlook (AO) estimates will be followed up by end of March planting intention figures and then the June Acreage report.

The crop production reports starting in August will further revise the planted acreage numbers through the season culminating in the final annual crop figures next January.

Mother Nature, changing crop economics, relative values and the underlying fundamentals of each crop, will influence their acreage shifts.

Along these lines this graphic shows the change in U.S. corn planted area in 1000's from the USDA February Ag Outlook projections to the March intentions report and then those figures until the end of June Acreage summary on the left-hand axis.

On the right-hand axis we report the new crop November soybean/December corn price ratio as of the end of March and as of the end of May.

We also show in the figures in the yellow boxes the percent of U.S. corn planted by May 15.

As noted, a relatively snug U.S. corn balance sheet and a very tight world one, especially without China, stands in contrast to a much more comfortable soybean stocks situation both here in the U.S. and globally.

Hence we saw U.S. corn prices recently pushing to their highest levels since last May while stuck in same range seen since last summer.

The current November 2025-December corn price ratio at 2.20 last week is well below the average 2.35 level and also points to an increase in corn planted area vis-à-vis soybeans for the coming season.

Since 1998 the March corn intentions have averaged 150,000 acres below the Feb USDA Ag Outlook projection with high being 3.60 million acres higher in 2016 and close to 4.0 million below in 2008.

Note the correlation between the acreage change from the Ag Outlook to the March intentions figure and the end of March SX/CZ ratio at 32.6%.

Since 1998 the June corn acreage figure has averaged 298,000 acres higher than the Ag Outlook projection and that has happened the past four years in a row with the high being 2.434 million acres higher in 2007 and the low being in 2020 when the June corn acreage projection came almost 5 million acres below the March intentions.

The June acreage figure is influenced by spring weather as cold and wet conditions have often resulted in that planted area number coming in well below what was intended with a correlation of 43%.

As noted last week, prospective per acre returns for corn and soybeans are not that spiffy so it is unlikely that total acreage of both will increase so corn prices staying high relative to soybeans will be needed encourage a shift.

Farmers do like to seed corn and have seen in the past they often stick with their planned rotations even if bean prices improve relative to corn over the spring and adverse spring weather results in delayed seedings.

A dry and warm spring should allow corn acres to increase along with the fact that planting costs for corn have come down quite dramatically over the past two years and corn yields have held in better than bean yields over the past few seasons.

Note we have had back-to-back years of record U.S. corn yields whereas an all-time high in soybean yields has not been seen here since 2016.

(c) Copyright 2025 DTN, LLC. All rights reserved.